What is included in a standard title insurance policy?

Answer:

The standard title insurance policy exists in two basic
types - owner's and lender's coverage. The lenders title policy will be
purchased with every home buying or home refinancing transaction. The owners
title insurance coverage is not obligatory and cannot be transferred to a
subsequent home buyer.

The standard lenders title
insurance policy protects the lender for the duration of the loan and up
to the existing loan principal. It is a decreasing type of insurance
policy. When the loan is repaid or refinanced, the lender title policy is
no longer valid.

The standard owners title
insurance policy covers the buyer's ownership interest in the property -
only past history and previous owner acts existing before the date the
title policy was bought are covered. For title issues arising after the
policy was bought extended title coverage is needed.

Sometimes, it is recommended that extended title coverage is
purchased; sometimes it may not make sense to buy owners title coverage. It is
suggested that you buy a combined lender - owner title insurance policy to
reduce the costs and get the most of it.

The standard title insurance is very property specific.

The standard title coverage addresses previous tax liens and
mortgages. It is supposed that most title issues creating a "cloud on the
title" affecting the title marketability will be removed prior to the real
estate transaction.

98% of title defects uncovered through a title search are
removed prior to signing the title policy. If the existing title defects cannot
be removed before the home purchase takes place, the buyer is given the choice
to

Not purchase the property;

Accept the defect. In that
case, the title policy will specifically exclude the defect from the
coverage.

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